Contingencies, Commitments, and Going Concern

This chapter covers uncertainty in reporting. The core issue is deciding when an uncertain event requires accrual, disclosure, or no recognition at all, and how that decision changes when the issue involves commitments or going-concern concerns.

In This Chapter

• Loss Contingencies, Gain Contingencies, and Disclosure Thresholds covers the basic recognition split.
• Legal Claims, Warranties, Guarantees, and Potential Liabilities applies contingency rules to common situations.
• Commitments, Purchase Obligations, and Lease-Related Disclosures addresses obligations that may require disclosure without current recognition.
• Going Concern Evaluation and Disclosure Under ASC 205-40 covers substantial-doubt evaluation and disclosure.

How to Use This Chapter

• Separate accrual, disclosure, and no-recognition outcomes before writing an entry.
• Treat commitments as disclosure and completeness problems unless performance has already occurred.
• Return here whenever a FAR miss involves probability, estimability, or going-concern treatment.

In this section

• Loss Contingencies, Gain Contingencies, and Disclosure Thresholds
  FAR recognition and disclosure thresholds for loss contingencies, gain contingencies, probability, and estimability.
• Legal Claims, Warranties, Guarantees, and Potential Liabilities
  FAR application of contingency rules to lawsuits, guarantees, warranties, and other potential obligations.
• Commitments, Purchase Obligations, and Lease-Related Disclosures
  FAR treatment for noncancelable purchase obligations, executory commitments, and lease-related disclosure boundaries under current GAAP.
• Going Concern Evaluation and Disclosure Under ASC 205-40
  FAR coverage of substantial doubt, management evaluation periods, mitigating plans, and going-concern disclosures.